Property sales: How IRAS gauges taxability of gains

Singapore does not have a capital gains tax. However, gains from the disposal of property are considered as taxable income in certain circumstances. IRAS will study the specific facts of such cases and use the widely accepted “Badges of Trade” yardstick to determine whether the gains are income in nature. This yardstick includes the following factors that will be considered in totality:
a) intention of purchasing the property;
b) length of property holding period;
c) frequency and volume of similar transactions;
d) improvements made to the property to better attract buyers; and
e) financing arrangements of the property.

IRAS reviews property-related transactions (especially those with short holding periods) as well as rental income information to ensure that such income have been properly declared and taxed accordingly.